Goldman’s compliance with the US Foreign Corrupt Practices Act is being examined following an enquiry by the Securities Exchange Commission (SEC) into whether banks, hedge funds and private-equity firms paid for access to government-run funds.

Forbes and the Telegraph reported in May that the LIA had entrusted $1.3bn to Goldman Sachs in 2007, of which the investment bank lost approximately 98%.

In return for the failed investments, Goldman Sachs offered enraged Libyan officials large stakes in the company and other investment options including, ‘preferred shares, unsecured debt, a special purpose vehicle in the Cayman Islands, and investments in credit default swaps.’

The Foreign Corrupt Practices Act forbids US companies from paying bribes to officials of overseas governments. Agents working with sovereign wealth funds can be considered government officials.

Goldman have given no further details about the investigation and the SEC declined comment.

The report is one of many looking at investment banks’ involvement with North African countries in the aftermath of the Arab Spring.

Earlier this year the Bureau and the Guardian reported on practices by HSBC in Egypt, which enabled the enrichment of senior government officials.

Reuters also reported in January that Tunisia’s first Islamic bank, Ziytouna Bank, was put under the control of the central bank. The bank is owned by Sakher Materi, the son-in-law of deposed leader Ben Ali.

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